Here’s our recap of the final trading day of January. It was an ugly finish to the month, with stocks ending sharply lower in the wake of disappointing earnings and continued worries about emerging markets. Read Market Snapshot for a summary of Friday’s market action.

Worries about the so-called January indicator aside, stock-market bulls will no doubt be glad to get January and its emerging-market turmoil behind them. As of Thursday’s close, the S&P 500 was on track for its biggest January percent drop since 2010, while the Dow is eyeing its worst January since 2009.

“While China and the Fed had been seen as the major catalysts throughout 2013, markets were caught out by the extent of recent emerging market difficulties and the knock on effect has been more pronounced than many investors expected. However investors will be hoping that they can isolate the current currency concerns and that the equity market juggernaut gets back on the right road,” said Rebecca O’Keeffe, head of investment at London-based stockbroker Interactive Investor.

The University of Michigan’s consumer sentiment gauge fell in January to a final reading of 81.2 from 82.5 in December, accoridngot news reports. Economists were bracing for worse, having penciled in a drop to 81.

The Dow, which had fallen more than 200 points in early action, continued to trim its decline but remains down 182 points, or 1.1%, at 15,668. The S&P 500 is off 16.16 points at 1,778.03.

The world’s largest retailer didn’t help sentiment early Friday when it cut its forecast for fourth-quarter profit. Wal-Mart pegged earnings from continuing operations at between $1.50 and $1.60 a share, including a hit from the closing of 50 stores in Brazil and China, and a transaction in India. That’s below the low end of the companies previous range of $1.60 to $1.70 a share and the consensus produced by a FactSet survey for earnings of $1.65.

The January assault on U.S. stocks has major indexes flirting with some pretty important support levels on the charts.

MarketWatch’s Barbara Kollmeyer has a round-up of what the technicians are saying about the S&P 500. The 1,775 and 1,700 levels are both seen as levels to watch.

Right now, the S&P 500 is off 16.33 points, or 0.9%, at 1,777.88, so far holding above the January intraday low of 1,770.45 set on Wednesday. The Dow, off more than 192 points at 15,656.08, earlier hit its lowest level since Nov. 8.

As selling of stocks accelerated this week, long-dated Treasurys rallied, as investors flocked to the safety of U.S government debt market. The yield on the 10-year Treasury note is at 2.65% after dropping more than 3 basis points today. For more on that, read our regular bond report.

They’ve only served to stoke fears that the euro zone, after managing last year to post a long-delayed but meager recovery, is now threatened by the specter of deflation. That’s only going to make next week’s ECB meeting, and Mario Draghi’s monthly news conference, all the more the focus of attention.

While we’re on the subject of Europe, a lot of investors piled into the Continent in the latter half of last year on ideas the U.S. rally was getting frothy.

While U.S. stocks actually kept moving from record to record, Europe solidly outperformed in a pretty impressive game of catch-up. But now, with valuations on both sides of the Atlantic looking pretty full, further outperformance is far from a sure thing, strategists say, which might make for more of a stock-picker friendly environment.

As a reminder, this 1770 level marks the convergence of the previous support-and-resistance zone with the 100-day moving average, a long-term bullish trend line and the 38.2% Fibonacci retracement level of the upswing from the October low.

At the time of this, the index is displaying a bullish hammer candle on the daily chart. If it closes the day around these levels, or better still higher, then we could well see a sharp rally next week. The first obvious level of resistance comes in around 1805, followed by 1820. However if and when the index closes below 1770 then we could easily see another sharp sell-off towards, and possibly beyond, the 200-day moving average, at around 1710.

It appears that not enough girls (or boys) wanted Barbie dolls for Christmas. To be fair, the boys and girls in North America just did not covet other Mattel’s toys that much either, as sales fell 10%.

The toy-maker is punished pretty badly today, with shares down nearly 10%.

But potentially bad news for Amazon customers’ wallets could be really good news for shareholders, writes MarketWatch’s Rex Crum, weighing in on Thursday’s revelation that the online retailer is weighing a potentially big hike in the annual price of Prime, it’s two-day “free” shipping program.

You may be asking, who the heck is Satya Nadella? But Microsoft investors seem to be happy with speculation that the executive vice president of cloud and enterprise is the top candidate to replace the retiring Steve Ballmer as CEO of the software giant.

Bernstein Research’s Mark Moerdler offers up one reason why investors seem to be taking to heart the possibility of Nadella at the helm after endless rounds of speculation that focused on corporate superstars such as Ford’s Alan Mulally.

It’s because Nadella is “an enterprise guy,” Moerdler said. “The real opportunity for Microsoft is in that they are moving to more cloud and subscription services. And here’s a guy who does that.”

“We can blame the recent pullback on the emerging markets or capital flows, but at the end of the day, it was going to happen anyway because markets rallied a bit too much at the end of last year,” says Jim Russell, senior equity strategist for U.S. Bank Wealth Management.

We would consider this as a buying opportunity. The jury is out on whether stocks will have a bigger correction, but for longer-term our outlook is positive.

One of the reasons for such outlook is that inflation in developed countries and many large emerging markets remains low, allowing central banks to retain accomodative policies.

Though they have problems of their own, countries such as India, Turkey and South Africa have hiked rates in an effort to ease pressure on their currencies — pressure attributed in part to concerns over the Fed’s tapering of its bond purchases, which may now be drawing money away from developing countries.

Critics found a sympathetic ear in Kansas City Federal Reserve Bank President Esther George, who told an audience in South Africa that she feared the costs of the Fed’s bond-buying plan “can influence other countries by distorting their exchange rates and balance of payment positions, capital flows and rates of credit expansion.”

Stocks attempted to erase losses in mid-afternoon, with the Nasdaq Composite briefly turning positive and the S&P 500 coming within a whisker of unchanged. Then the rebound ran out of steam.

We’ll see if we get another push to the upside before the closing bell or whether that was a last-gasp effort at a rebound. All major indexes, including the Nasdaq, are in negative territory. The Dow is again sporting a triple-digit loss but indexes remain well off those early lows.

The closing bell rings out January. There’s plenty of carnage to be seen, with the S&P 500 and the Dow posting their biggest monthly percentage decline since May 2012 and marking the first January decline since 2010.

An afternoon rebound ran out of steam, leaving stocks to end the day with steep losses, though off of early lows. The drop added to a dismal January for stocks, with the latest weakness inspired by disappointing earnings from Amazon and Mattell, fears of euro-zone deflation and continued concerns about emerging markets.

The Dow ends the day down 149.76 points, or 0.9%, at 15,698.85. For the month, the blue-chip index lost 5.3%.

The S&P 500 fell 11.60 points, or 0.6%, to 1,782.59, contributing to a 3.56% monthly drop.

The Nasdaq Composite ends 19.25 points lower, a loss of 0.5%, at 4,103.88. The index fell 1.7% for the month.

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